Market Review 29-11

Market Review 29-11

Forex News

GBP/USD Price Forecast – GBP/USD Boosted By Comments From ECB’s FCP Report & Dovish Comments From Fed Chair Powell

From: FXempire.com

Brexit angst has been shelved for the moment as Dollar turned weak in broad market following dovish comments from Powell.

The pound sterling yesterday leapt higher as markets brushed off building pessimism over Brexit uncertainty following the release of the UK’s financial stability report and remarks from Bank of England Governor Mark Carney. The BOE’s Financial Policy Committee (FCP), which monitors the functionality of Britain’s financial system to ensure it can fulfill its responsibilities when markets are either smooth or rocky, publishes the financial stability report which evaluates the effects of possible adverse shocks to the banking system and economy in the UK. The report released yesterday concluded that the UK financial system is “resilient” to the wide range of risks the country faces including Brexit and is strong enough to continue serving British households and business in the event economic shocks materialize.

Positive Signal From BOE Gave Sterling Breathing Space From Brexit Uncertainties

In an effort to reassure markets that the Bank of England is fully prepared regardless the Brexit outcome, Carney stated that BOE has contingency plans in place to support market functioning even in case of disorderly Brexit that has adverse effect on economy which served as solid fundamental support for British Pound across the broad market. The positive sentiment surrounding GBPUSD pair was further boosted by dovish comments made by Fed Chair Jerome Powell yesterday when he said that U.S. interest rates were just below neutral which was in stark contrast to hawkish comments made by both Fed bigwigs and Powell himself in his previous Fed rate hike related speeches and investors have interpreted the latest comment as signal that rate hike cycle was nearing its end which caused US Treasury Yields to go lower and also saw US Greenback lose ground significantly across major risky assets in all key global markets.

As of writing this article, GBPUSD pair is trading at 1.2839 up by 0.10% on the day. On release front today, the British side of market which sees release of BOE Consumer Credit, Mortgage approvals and lending data, while US markets see the release of Core PCE Price Index, PCE Deflator, Personal spending and Pending home sales data. The possibility for slow down in rate hike pace would increase if the core PCE prints below estimates. When looking from technical perspective, the 4 hours chart shows that the pair advanced above its 20 SMA but also that the 200 EMA heads south above the current level, while the Momentum indicator barely advances below its 100 level. The RSI indicator, on the contrary, heads north around 58, suggesting the current rally may continue during the upcoming sessions, or at least until the next Brexit negative headline gives speculative interest a reality check.

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AUD/USD back over 0.7300 following Fed Powell’s Dollar-dove statements

From: FXstreet.com

  • AUD/USD into fresh near-term highs as the Greenback slumps
  • USD falls sharply as Fed’s Powell says policy rate is ‘just below’ estimates of neutral

 
The AUD/USD surged late Wednesday after the US Federal Reserve’s Jerome Powell hit the newswires with a more-dovish-than-expected stance on IS interest rates, as well as the US domestic economy’s health overall, sending the US Dollar spiraling as traders raced to readjust their positions amidst a modified Fed outlook.

Fed’s Powell: No pre-set policy path; paying ‘very close attention’ to data

Fed chair Jerome Powell paved the way for a lack of continued forward guidance in Fed policy today, highlighting that the US Federal Reserve is not operating off of a ‘preset policy path’, noting that the world’s largest central bank is ‘watching the data’. The USD took a header as investors grappled with a Fed outlook that could include an early stop to the central bank’s rate hikes, as the Federal Reserve’s moves will now be entirely dependent on data releases looking forward, meaning more emphasis than usual will be placed on US economic data, including NFP, wages, quarterly GDP figures, and unemployment numbers.

For the Aussie, Private Capital Expenditures (CAPEX) data is due early Thursday at 00:30 GMT, and expected to print at 1.0% for the third quarter, compared to the previous quarter’s showing of -2.5%, but the Fed’s bomb-drop on a lack of clarity regarding future rate hikes will largely overshadow the Australian reading.

AUD/USD levels to watch

The Aussie heads into Thursday trading on a rapid rise, leaving the pair isolated in an extreme zone, and as FXStreet’s own Ross Burland noted: “AUD/USD has vaulted 0.73 the figure with ease over the dovishness in Powell’s speech. The next barrier is 0.7338 as being the 11-week high that guards a run towards the 200-D SMA at 0.7425 and confluence of the 38.2% Fibo of the 2018 highs to recent lows at 0.7443. On the flipside, the cluster of hourly SMAs around the session lows at 0.7220/30, with the confluence of the 21-D SMA at 0.7232 guards a break to the 50-D SMA at 0.7180 ahead of the 0.7164 recent lows that guard 0.7085 as the 10th Sep lows. 0.7020 are the 2018 lows.”

  • Pivot point support levels: 0.7200, 0.7162 and 0.7125.
  • Pivot point resistance levels: 0.7335.

 
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Stock Market News

Unilever CEO Polman to retire, replaced by beauty head Jope

From: Reuters.com

Anglo-Dutch consumer goods company Unilever (ULVR.L) said its CEO Paul Polman was retiring, less than two months after a damaging row with shareholders, and would be replaced by the head of its beauty unit Alan Jope from January 1.

Polman’s exit comes after the maker of Dove soap and Ben & Jerry’s ice cream was forced to scrap a plan to move the company headquarters to the Netherlands in October, following a shareholder revolt.

Unilever said that Jope, 54, the boss of its largest division, had been appointed after “a rigorous and wide-ranging selection process”. Polman would stay on for six months to support Jope’s transition into the role, the company added.

Polman has been at the helm of Unilever for 10 years, generating big returns for shareholders and fighting off a $143 billion takeover approach by Kraft-Heinz (KHC.O) in 2017.

He said he was confident the company would prosper under Jope.

“His (Jope’s) appointment demonstrates the strength of Unilever’s succession planning and talent pipeline,” Polman said in Unilever’s statement on Thursday.

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Facebook Considered Charging For User Data Access

From: PYMNTS.com

Court documents have revealed that Facebook has considered charging companies for ongoing access to user data.

The Wall Street Journal viewed internal emails that showed Facebook employees had discussed pushing some advertisers to spend more in return for more access to user data.

An unidentified Facebook employee suggested shutting down data access “in one-go to all apps that don’t spend… at least $250k a year to maintain access to the data,” according to one email. However, the full content of the message wasn’t included in the court documents.

The email exchanges also revealed employees discussing how much data access is given to companies such as Amazon, Tinder and the Royal Bank of Canada.

The news is a departure from Chief Executive Mark Zuckerberg’s previous declaration that the social media site simply doesn’t sell data.

The emails — which span 2012 to 2014 — are from a lawsuit against Facebook filed by Six4Three LLC, the developer of a now-defunct app. The company sued Facebook in 2015 over data policies it claimed were anti-competitive and favored specific companies. The majority of the documents filed in the case have been placed under seal.

But this week, British lawmaker Damian Collins, chairman of the House of Commons Digital, Media, Culture and Sport Committee, said he is going to release the documents he obtained from the lawsuit once personal information has been redacted. Collins has been a vocal critic of the social media giant.

And he’s not the only one: Facebook has been under fire since it was discovered that up to 87 million of its users had their data shared with controversial research firm Cambridge Analytica. As a result, the scandal is being investigated by the SEC, the FBI and the Justice Department.

Zuckerberg was also called to testify on Capitol Hill, where he was grilled on fake news, Russian infiltration of the American election system, monopolistic business practices, racial targeting, mayhem broadcast live on its platform, hate speech, cyber bullying, data privacy and genocide in Myanmar.

“We have made a lot of mistakes in running the company. It is impossible to start a company in your dorm room without making mistakes,” Zuckerberg said of the errors made during the “move fast and break stuff era.” “Overall, I would say we’re going through a broader philosophical shift,” he said.

“It’s clear now that we didn’t do enough to prevent these tools from being used for harm as well,” Zuckerberg continued. “And that goes for fake news, foreign interference in elections and hate speech, as well as developers and data privacy.”

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Cryptocurrency News

6 Big Takeaways from SEC Chair Clayton’s Crypto Remarks

From: Coindesk.com

The tea leaves were swirling Tuesday after Jay Clayton, chairman of the U.S. Securities and Exchange Commission, dropped some hints about what regulators in the United States will (and won’t) do in the crypto space in the coming months and years.

Clayton gave a fireside chat in front of a packed room at CoinDesk’s Consensus: Invest event in Manhattan yesterday afternoon. And while Clayton made it clear that he has given cryptocurrency a lot of thought over the last year, there was still plenty to read between the lines, including his thoughts on the exchange ecosystem and the question of when ICO-derived tokens count as securities.

Following the on-stage conversation, three longtime experts in crypto law dissected the nuances of what Clayton said during a taping of CoinDesk Live (which you can watch below). We were joined by Caitlin Long, of the Wyoming Blockchain Coalition; Stephen Palley, of law firm Anderson Kill; and Lewis Cohen, of DLx Law.

While this panel of experts touched on a range of issues, there were some major takeaways to glean from Clayton’s talk. Here’s what they said:

1. No bitcoin ETF any time soon

Perhaps first and foremost, it doesn’t seem like that the SEC will greenlight a bitcoin exchange-traded fund anytime soon.

“I know there are a lot of folks who would love to have the ETF approved but I don’t think that’s very likely,” Long said.

She pointed to third-party custody of crypto assets and market manipulation as two stated stumbling blocks for an exchange-traded fund.

On custody, Long critiqued the rule itself, saying: “I think there’s a real question as to whether a custodian is needed if all the assets are actually sitting on a blockchain.”

2. Regulated exchanges are needed

Clayton made it very clear that he did not trust existing crypto exchanges to prevent price manipulation.

The panel noted that Clayton seemed to hint that some kind of move to get bitcoin onto a regulated exchange may be underway, with panelists pointing to remarks made earlier in the day by New York Stock Exchange Chairman Jeff Sprecher.

But Cohen argued that bitcoin is a “wild beast” and regulators may not appreciate how hard it could be to tame.

3. The rise of “CorpoCoin”

To further tame crypto, Clayton also made it clear that anti-money laundering protections had to be put in place for crypto trading.

Palley wondered what the implications of that push might hold for the body of retail investors that are active in the market today.

“My question is this,” said Palley. “There’s a lot of institutional money here. If you regulate it and you have market surveillance, will retail interest remain the same?”

Borrowing a term she credited to Andreas Antonopoulos, Long described that future as one for “CorpoCoin,” adding:

“What’s going to happen if this becomes too corporatized, is the crypto community will just fork off.”

4. ICO-funded startups should go see the SEC, ASAP

Repeating a theme Clayton stressed in his talk, Cohen argued it would behoove crypto startups that raised money in 2017 and early 2018 to go to the regulators now.

Paraphrasing Clayton, Cohen said: “Those that come see us may get one deal, those we come find may get another.”

Earlier this month the SEC issued its first civil penalties to two startups that did not properly register their securities offerings. With those “templates” in hand, Palley said, the SEC might be getting ready to move much faster on ICOs.

5. No action on “no-action” letters

One of Clayton’s messages from the stage was that the SEC’s doors are open to startups working in the industry, particularly those that are issuing their own tokens. To this end, the agency recently launched a new fintech-focused division with the explicit goal of fostering communication with ICO startups.

The panel agreed that what startups in this space want are so-called “no-action” letters (letters in which the SEC confirms that it will not move against a company based on its business model).

The letters have long been expected, but no startups have received one yet, according to Long.

“If that’s what [Clayton] really wants, for people to come get no-action letters, the U.S. is already behind and we’re gonna fall even further behind,” she said.

6. Courts may see ICOs differently

While regulators are already on it, there’s another frontier for determining the validity of new funding mechanisms for blockchain startups.

As Palley asked: “What are courts going to do when they start parsing through token sales?” In fact, it’s already starting to happen.

Maybe in 10 years – or perhaps even less – Palley said, the U.S. Supreme Court may take a look.

Broadly speaking, Clayton argued from the stage that the SEC is happy to help crypto startups in the U.S. find a way to get in compliance with the law, but our panel of regulatory experts said that, in practice, this turns out to be much more difficult (and costly) than the chairman made it sound.

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